Standard Chartered Bank v. Senate Comm. on Banks, G.R. No. 167173, Dec 27, 2007 Nachura, J.

Facts: The petition seeks the issuance of a temporary restraining order (TRO) to enjoin respondent from (1) proceeding with its inquiry pursuant to Philippine Senate (P.S.) Resolution No. 166; (2) compelling petitioners who are officers of petitioner SCB-Philippines to attend and testify before any further hearing to be conducted by respondent, particularly that set on March 15, 2005; and (3) enforcing any hold-departure order (HDO) and/or putting the petitioners on the Watch List. It also prays that judgment be rendered (1) annulling the subpoenae ad testificandum and duces tecum issued to petitioners, and (2) prohibiting the respondent from compelling petitioners to appear and testify in the inquiry being conducted pursuant to P.S. Resolution No. 166.

On February 1, 2005, Senator Juan Ponce Enrile, Vice Chairperson of respondent, delivered a privilege speech entitledArrogance of Wealth[1] before the Senate based on a letter from Atty. Mark R. Bocobo denouncing SCB-Philippines for selling unregistered foreign securities in violation of the Securities Regulation Code (R.A. No. 8799) and urging the Senate to immediately conduct an inquiry, in aid of legislation, to prevent the occurrence of a similar fraudulent activity in the future. Prior to the privilege speech, Senator Enrile had introduced P.S. Resolution No. 166,[2] to wit:

RESOLUTION

DIRECTING THE COMMITTEE ON BANKS, FINANCIAL INSTITUTIONS AND CURRENCIES, TO CONDUCT AN INQUIRY, IN AID OF LEGISLATION, INTO THE ILLEGAL SALE OF UNREGISTERED AND

HIGH-RISK SECURITIES BY STANDARD CHARTERED BANK, WHICH RESULTED IN BILLIONS OF PESOS OF LOSSES TO THE INVESTING PUBLIC On February 28, 2005, respondent commenced the investigation. Petitioners brought to the attention of respondent the lack of proper authorization from affected clients for the bank to make disclosures of their accounts and the lack of copies of the accusing documents mentioned in Senator Enrile's privilege speech, and reiterated that there were pending court cases regarding the alleged sale in the Philippines by SCB-Philippines of unregistered foreign securities. Petitioners were later served by respondent with subpoenae ad testificandum and duces tecum to compel them to attend and testify at the hearing set on March 15, 2005. Hence, this petition. Issue: WoN the respondent has encroached the powers of the judiciary by the investigation being done on the alleged SCB-Philippines illegally selling unregistered foreign securities which resulted to the loss of billions of pesos of their clients since the courts took cognizance of this (pending cases) Ruling: Petitioners argue that respondent has no jurisdiction to conduct the inquiry because its subject matter is the very same subject matter of several cases pending in courts (Manuel V. Baviera vs. Hon. Esperanza P. Rosario, et al., Manuel V. Baviera vs. Hon. Rafael Buenaventura, et al., Manuel V. Baviera vs. Hon. Esperanza Paglinawan Rozario, et al., Mr. Noel G. Sanchez, et al. vs. Standard Chartered Bank, and etc. Dami pa). The unmistakable objective of the investigation, as set forth in the said resolution, exposes the error in petitioners allegation that the inquiry, as initiated in a privilege speech by the very same Senator Enrile, was simply to denounce the illegal practice committed by a foreign bank in selling unregistered foreign securities x x x. This fallacy is made more glaring when we consider that, at the conclusion of his privilege speech, Senator Enrile urged the Senate to

immediately conduct an inquiry, in aid of legislation, so as to prevent the occurrence of a similar fraudulent activity in the future. The investigation was not made in aid of collection as the petitioners claim it to be. Rather it was made with the intent to prevent the future occurrence of any similar fraudulent activity by the banks in general. As regards the issue of self-incrimination, the petitioners, officers of SCB-Philippines, are not being indicted as accused in a criminal proceeding. They were summoned by respondent merely as resource persons, or as witnesses, in a legislative inquiry. Petitioners neither stand as accused in a criminal case nor will they be subjected by the respondent to any penalty by reason of their testimonies. Hence, they cannot altogether decline appearing before respondent, although they may invoke the privilege when a question calling for an incriminating answer is propounded. WHEREFORE, the Petition for Prohibition is DENIED for lack of merit. The Manifestation and Motion dated June 21, 2006 is, likewise, DENIED for being moot and academic